Functions of economic theory

Studying economic phenomena and processes, laws and patterns of their course and development, the mechanism of management, economic theory performs three main functions. First, it is a cognitive function. It means that economic theory as a science serves people to learn complex, largely interdependent and intertwined processes of economic development, indistinguishable to superficial observation, to […]

T. Veblen's approach

The focus of attention of another scientist, T. Veblen (1857-1929), was a criticism of the limitations of the economic approach to consumption. Economists, he wrote, have put forward the false thesis that consumption is the ultimate goal of production, but have paid little or no attention to how consumers actually behave or what impact the […]

Factors affecting the exchange rate

Based on the theory of PPPs, it is possible to predict changes in the nominal exchange rate in the long term, when the economy is at the level of potential output, and prices are flexible. The exchange rate, as a price, deviates from the value basis (purchasing power of currencies) under the influence of supply […]